VSNL Slow-Moving Giant

A virtual monopoly in the ISP segment in 1998-99, with a

marketshare of 83%, Videsh Sanchar Nigam Ltd (VSNL) saw its share drop to 36% in

fiscal 1999-00. In terms of revenue growth, the company managed to post a modest

22% to touch Rs 207 crore in ISP business. Though the overall internet access

market expanded from 275,000 to 942,000 subscribers, only the quick and nimble

private players made the most of the market conditions–of course, at the cost

of VSNL.

In

the last fiscal, VSNL did not involve itself in much activity on the internet

service provider (ISP) front. All it did was to keep following new players and

their innovative ideas. For example, VSNL was not the first to bring out the

innovative unlimited access packages, neither was it the first to reduce net

charges.

Also, in the last fiscal, when internet access became

virtually a commodity, available off the shelves,

VSNL still continued with its age-old booking system at its counters. The only

advantage VSNL had over its competition was that it was both the infrastructure

provider as well as a player.

And

the subscribers perceived this advantage to mean that VSNL could give faster

access. However, even this citadel would be broken soon as private players have

started setting up their own internet gateways. Dishnet has even planned to lay

high bandwidth submarine cable of 2.5 terabits.

All this leaves VSNL in a precarious position in this

segment. The private players will continue with their innovative game plans,

leaving VSNL to follow.

Last fiscal, though there was much talk of hiving off the ISP part as an

independent company, nothing eventually came out of it. It is time VSNL finally

took the plunge and made its net business independent, to take on the

competition.

Fact Sheet

START-UP YEAR: 1995 PRODUCTS AND SERVICES: ISP and value added services ADDRESS: Videsh Sanchar Bhavan, MG Road, Fort, Mumbai 400 001 TEL: 262

4020 FAX: 262 4466 WEBSITE: www.vsnl.com